- (1.)xtreme views as to what is meant by 'Public policy', would be found propounded by the British Courts. Burrough, J. in Richardson v. Mellish, (1824) 2 Bing 229, described public policy as "a very unruly horse and when once you get astride it you never know where it will carry you". The answer to this was given by Lord Denning MR in Enderby Town Football Club Ltd. v. Football Association Ltd., (1971) Ch 591, when he said 'with a good man in the saddle, the unruly horse can be kept in control. It can jump over obstacles. It can leap the fences put up by fictions and come down on the side of justice."
(2.)the case of Union of India that the arbitral award given by the arbitrator is in conflict with the public policy of India, and therefore, it is liable to be set aside.
(3.)With a view to examine this aspect of the matter, the facts be noticed as under : The petitioner in this case invited tenders from millers for grinding of wheat and transportation of flour (atta) to various destinations. This tender was valid for a period from Ist Aug., '97 to 31st July, '99. Respondent-Bharat Flour Mills (hereinafter referred to as respondent mill), quoted the rates. The tender was accepted. The memorandum of understanding was regarding a composite contract for a period from 1st Aug., '97 to 31st July, '99. Out of the overall value of contract, the transportation of atta was one element. The value of this transportation component in the entire contract for twenty one months was to the extent of Rs. 2,58,74,417.00. Even though, the outer limit was indicated as 31st July, '99, the respondent mill extended the validity of the offer vide letter dt. 17th Oct., '97. As the facts are being noted, one fact which is projected by the petitioner is that respondent mill with a mala fide intention and with a view to secure the contract by unsetting other firms had quoted low rates for transportation of Atta, be also taken note of. There was a clause in the contract that the transportation rates are revisable after every six months. Clause 2(g) dealt with this aspect of the matter. There was another clause in the shape of Clause 34, which enabled the parties to get the dispute, if any arising between the parties to be settled through an arbitrator. A dispute did arise. This was with regard to the fixation of transportation charges after initial six months. As indicated above, it is Clause 2(g), which provided that the transportation rates are subject to revision and refixation by the Tender Purchase Committee after every six months. It was regarding this revision and refixation, a dispute arose and was referred to the sole arbitrator namly Lt. Col. Shiv Dayal, 5121 ASC Bn (MT). As Clause 2(g) is relevant, it is being quoted below : "In case contractor fails to transport Atta in the CHT as per the requirement of defence, the contract operating officer will be at liberty to hire civil transport or transport atta in DD vehs at the risk and expense of the contractor. Any extra expenditure incurred by the defence will be recovered from the contractor. The transportation rates are subject to revision and refixation by Tender Purchase Committee every six months."